Low interest rate rally

Dow is having a good day, up 102, advancers over decliners 3-1 & NAZ rose 26. Banks responded to favorable testimony by Ben Bernanke & the Financial Index is putting more space between it & the important 190 resistance level. Nothing like testifying before congress about keeping interest rates low for boosting stock prices, especially bank stocks.


IND S&P 500 FINANCIALS INDEX

Value 196.50

Change 3.19

% Change 1.7%

MLPs are stuck in a rut, the index has hardly budged from 291 for 7 days (up pennies today). The REIT index was up 1 to the 179s, staying close to the 281 Sep high. Junk bond funds inched higher as did Treasuries. The yield on the 10-year Treasury bond was down 1 basis point to 3.68%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks

Oil & gold were essentially even.

CLJ10.NYM

...Crude Oil Apr 10

...78.92

... 0.06 .......(0.1%)

Gold

...1,102.70

___-0.50

___-0.1%

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Sales of newly built homes unexpectedly fell to a record low in Jan hinting at potential trouble for the fragile housing market recovery. The Commerce Dept reported sales dropped 11.2% to a 309K unit annual rate (not included on the graph below), the lowest level since records started in Jan 1963, from an upwardly revised 348K in Dec. This was the 3rd straight month that new home sales fell & the percentage decline in Jan was the largest in a year. Compared to last Jan, sales fell 6.1%. The drop in sales last month came despite the extension of a popular tax credit for first-time buyers, which was also expanded for repeat buyers.

•Sales of New Homes in U.S. Unexpectedly Declined in January to Record Low


Home purchases - 1 year





Ben Bernanke told Congress that record-low interest rates are still needed to ensure that the economic recovery will last & to help cushion the sting of high unemployment. He struck a confident tone that the recovery should endure, but he also sought to tamp down expectations. Moderate economic growth will lead to only a slow decline in the nation's nearly double-digit unemployment rate. There were no new clues about the timing of an interest rate increase, many think that is months away. Treasuries rose slightly. A graph of the Treasury yield curve is shown below.

•Bernanke Says `Nascent' Recovery in U.S. Still Requires Low Interest Rates

Source: Bloomberg






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Dow has been treading water for the last week but gained today despite more dismal housing numbers. Bernanke & Toyota officials are testifying, nothing new is expected. Let's wee what the PM brings.

Dow Jones Industrials --- 2 weeks